Can I repair the damage in time?

Mr-HP

My wife and I are looking to buy a house together in 4-5 years time but I have a terrible credit history and am worried that it's been damaged so bad that it won't be good enough to get a mortgage.....

Bit of backstory first....

I am 35 and have been terrible with credit for the last 15 years (could kick myself now).... was a single bloke for 10 of those years and never planned for the future as never felt I would want a house/mortgage or need a good credit rating.

I met my wife and when our financial connection was made I damaged her credit rating too, she has one default against her though that is now paid off in full and will drop from her credit file in 2 years

I have had many defaults against my name, all which also will be cleared from my file within 2 years or so.

My issue is that I also had a provident account that I only paid a nominal fee on two accounts for the last 5 years (both now paid in full though) so have shown as a chronic late payer for all pretty much all of my recent credit history.

Since I have now had my lightbulb moment and want to be clear of debt, poor credit etc, our plan is to build our credit back up over 4-5 years when other debts will all be cleared and we can buy a house (we currently live in mortgaged house in my wife's name, owned before we met)

My question is though have I caused too much damage beyond repair or is it possible to put things straight so I would be accepted for a mortgage?

Thanks in advance

[Deleted User]

Nothing's impossible, particularly given enough time.

When it comes to mortgage time, engage a decent broker.

Mr-HP

What would you term as a decent broker?

[Deleted User]

Someone who deals with adverse credit, not a factory broker (eg L&C or Which) and definitely not an estate agent one.

Anthorn

Mr-HP wrote: »

My question is though have I caused too much damage beyond repair or is it possible to put things straight so I would be accepted for a mortgage?

Pretty simple really: 6 years after the date of your last default all of your defaults will have dropped off your credit history. Providing you don't get any more defaults you will therefore have no defaults.

So start rebuilding your credit now and I do mean now so that by the time you apply for your mortgage you will have built up a decent credit history.

But no defaults is only half the story: What follows is the history of each individual account. You can foul these with late payments, missing payments and going over limit. So avoid that fouling like the proverbial plague.

So rebuild your credit with new credit accounts such as sub-prime credit card, contract mobile phone, catalogue accounts, etc. Try Vanquis or Aqua Start credit card; 1 month rolling sim-only mobile contract; J.D. Williams catalogue account.

You'll be setting out on a well-trodden path, one which I myself followed. Good luck.

Chappaz

Give enough time to ensure that all defaults and black marks drop off your report.

In the mean time, get a credit card, start using it every month, and pay it off in full every month, so you can build up a history of on-time payments. But try not to have a balance of more than 30% on the card at any one time.

If you have any other payments being reported to the agencies, such as mobile phone contract, utility bills etc, just keep paying those on-time and they will contribute.

Even the account with the history of late payments should eventually drop off, but this would be around 6 years from the date it was closed.

You may be worth holding off on applying for a mortgage until any bad marks are gone, as you may be offered a more favourable mortgage (i.e. lower interest rate/smaller deposit) as a result.